Wilmington-based Chemours Co. reported lower earnings in the second quarter as demand dropped sharply in its key titanium oxide business. The company also cited illegal refrigerant imports to Europe as a factor.
In Friday trading, Chemours shares plunged 19.6 percent to $14.69 a share.
“The second quarter was challenging on a number of fronts, including softer than expected Ti-Pure demand and the continued impact of illegal imports of HFC refrigerants into Europe,” said Chemours CEO Mark Vergnano. “Both issues impacted our volumes in the second quarter and more than offset increasing adoption of Opteon mobile refrigerants in the United States and Asia, as well as productivity efforts. We are clearly not satisfied with these results and remain firm in our commitment to grow our businesses and improve the financial performance of Chemours.”
Second quarter 2019 net sales were $1.4 billion down from $1.8 billion in the record-setting, prior-year quarter.
Results were driven primarily by lower volume in Titanium Technologies, resulting in a 22 percent decrease in net sales. Currency and price were small headwinds in the quarter. Second quarter net income was $96 million, which included a $7 million charge related to the Fayetteville facility that has struggled wth water discharge issues.
Titanium Technologies segment net sales in the second quarter were $567 million in comparison to $862 million in the prior-year quarter. This decrease was a result of lower volumes of Ti-Pure titanium dioxide driven by a combination of weak demand and market share loss as we continue the implementation of the Ti-Pure Value Stabilization strategy. Global average selling prices were stable in comparison to last year’s second quarter.
As a result of the weaker financial performance in the second quarter and increasing economic uncertainty, the company is lowering its earnings guidance for 2019.
Vergnano concluded, “We are disappointed in having to reduce our guidance for 2019. However, as we look beyond the next two quarters, we remain confident in the growth prospects for each of our three core businesses. We have an outstanding asset base, strong balance sheet, the right strategies, and more importantly, a great team capable of navigating the business cycle. We will continue to work hard to increase the long-term value of Chemours, fully aligned with the interests of our shareholders.”
